The Pressure Piles on the Murdochs; Syrian Crackdown; "Collar Bomb" Suspect Arrested; Can England Dominate Cricket for Years to Come?

Aired August 16, 2011 - 16:00:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

MAX FOSTER, HOST: The pressure piles on the Murdochs after claims their executives knew more about phone hacking than they let on. Tough questions for Britain's prime minister, too -- a former aid gets dragged further into the scandal.

Plus, bringing Europe's finances closer together, but just how far are France and Germany willing to go?

The evidence is this letter written four years ago by the "News of the World's" former royal correspondent. He writes that that whole phone hacking was widespread and widely discussed at daily meetings.

That could contradict the testimony of media baron Rupert Murdoch's son, James. He seems likely to find himself back in the hot seat.

Dan Rivers lays out the latest developments in this explosive case.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN CORRESPONDENT: (voice-over): He's already faced the ferocity of a parliamentary grilling by British politicians about phone hacking at his company. New documents released by those politicians now cast doubt on James Murdoch's testimony.

Murdoch has always denied knowledge of a damning e-mail entitled "For Neville," which included transcripts of 35 hacked conversations believed to be intended for the "News of the World's" chief reporter, Neville Thurlbeck. The "For Neville" e-mail was disclosed during the settlement of a case brought against News International by Gordon Taylor, the former head of the U.K. Professional Footballers Association.

James Murdoch signed a check for almost $1.6 million to settle that case -- something he was quizzed about in parliament.

TOM WATSON, BRITISH PARLIAMENT MEMBER: When you signed off the Taylor payment, did you see or were you made aware of the "For Neville" e-mail, the transcript of

(INAUDIBLE) message?

JAMES MURDOCH, DEPUTY COO AND CEO, NEWS CORPORATION: No. I -- I was not aware of that at the time.

RIVERS: But now, this letter, released by parliament, contradicts James Murdoch's evidence. In it, News International's former lawyer, Tom Crone, says Murdoch was all too aware of the "For Neville" e-mail. "I have no doubt," the letter reads, "that I informed Mr. Murdoch of its existence, what it was and where it came from." now, James Murdoch may have to explain himself.

WATSON: It's highly likely James Murdoch will be invited back to give evidence. Before that, we want to take a very detailed account of what the former editor, Colin Myler, knew and the former lawyer, Tom Crone, knew. We've moved from the exposure of the hacking scandal to the second phase, which is the very details of the cover-up.

RIVERS: And this second letter may show more evidence of the cover- up. It was sent by former royal correspondent, Clive Goodman, in 2007, to News International's human resources department after Goodman left jail for phone hacking the royal family.

Two copies were sent to parliament. The version from News International is missing key details, revealed when News International's own lawyers sent a fuller version of the same letter to the committee.

In the blocked out paragraphs, Goodman says phone hacking was widely discussed in the "News of the World" daily editorial conference until explicit reference to it was banned by the editor.

That's devastating for the then editor, Andy Coulson, who told politicians in 2009...

ANDY COULSON, FORMER EDITOR, "NEWS OF THE WORLD": I never condoned the use of phone hacking nor do I have any recollection of incidences where phone hacking took place.

RIVERS: It's also a further blow to Prime Minister David Cameron, who later employed Coulson as communications director, a post Coulson resigned this year.

The full Goodman letter also includes claims the disgraced reporter won promises from the company as he faced jail time. Goodman says he was promised, "I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea. I did not and expect the paper to honor its promises to me" for lawyers representing phone hacking victims, that letter may be crucial.

MARK LEWIS, LAWYER FOR HACKING VICTIMS: He pleaded guilty to something on the basis that he didn't implicate others at the "News of the World" and it was payback time, it was payback time for him.

RIVERS (on camera): The more revelations that emerge, the more precarious is James Murdoch's position. He's not commented. Neither has anyone else implicated in these letters. But in the latest statement from News International, they say they recognize the seriousness of the materials disclosed, adding its committed to working in a constructive and open way with the authorities.

Dan Rivers, CNN, London.

(END VIDEO TAPE)

FOSTER: Some suspect that this newly released letter will become the smoking gun in this entire case.

Earlier, I asked the assistant editor of Britain's "Guardian" newspaper, Michael White, is this more damaging for the now shut down "News of the World" or the British government?

(BEGIN VIDEOTAPE)

MICHAEL WHITE, ASSISTANT EDITOR, "GUARDIAN" NEWSPAPER: My hunch would be, at the moment, it can only be a guess, more damaging for senior executives at News International. Les Hinton, the former top man in London, who's still in the frame, and, of course, young James Murdoch. He didn't know a lot about what was going on. But ignorance is no defense in law. And he was told about these payments -- all sorts of payments and all sorts of complications and didn't get to the bottom of it, but made assurances to the Select Committee, some of which he probably now regrets.

David Cameron is in a slightly different position. He said, famously, in public, "I believe in giving people a second chance," in respect to Andy Coulson, the man he hired both in opposition, later in government, to be his director of communications -- not his spokesman, not the official spokesman, but the man who sort of orchestrated the overall strategy.

And he can say, look, I was lied to. That's, in effect, what he's begun to say -- to imply in terms in recent weeks.

FOSTER: And that's exactly what the opposition is capitalizing on right now, isn't it?

They -- they're calling his judgment into question so they can then call his judgment into question on other issues. So in that way, it could be damaging if the opposition is successful with that strategy.

WHITE: Well, it's -- you -- you chip away at the authority of a prime minister, I'm afraid. In democratic societies, that's what oppositions are paid to do. And Gordon Brown, the last prime minister, 10 years after he sold Britain's gold reserves, the price has gone up. They're still on about it to undermine his authority.

So I'm afraid David Cameron will never quite escape this one, whatever happens, even if he was told to hire Andy Coulson by the tooth fairy himself.

FOSTER: And this is a story which the whole world has been interested it. But it's -- it's been going on for a very long time. It feels very, very complex right now.

But would you say that this letter is, in some way, the smoking gun on this story, the hacking story?

WHITE: It's certainly damaging. It certainly pulls a few more bricks out of the wall of News International's defense, which, if you remember, was that all these hacking activities of the British royal family was the activity of a rogue reporter and his investigator. Nobody else knew what was going on.

People who work in newspapers didn't believe that from day one. It just seemed inherently unlikely. And gradually, the bits of evidence have come forward. And this letter, which was originally redacted, that is to say, they had names and details crossed out, has now emerged in its full glory. And Mr. Goodman, the sacked -- jailed reporter, is saying I've been unfairly treated because this sort of behavior was discussed all over the newsroom until the editor told us not to do it. Wow!

(END VIDEO TAPE)

FOSTER: Michael White there of the "Guardian" newspaper, which really has led investigations into this whole story.

Elsewhere, the leaders of Europe's two richest economies discussed the debt crisis n how to stop the bleeding. But one possible solution, Eurobonds, is not going over well with Germany.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think that each state should be liable for its own debt.

(END VIDEO CLIP)

FOSTER: A closer look at the Germans' bailout fatigue later in the show.

Then a bizarre bomb threat, an international manhunt and now a big arrest -- the FBI nabs an Australian accused of extortion and much more.

Plus, the U.S. president's plan to revise stagnant economies in small town America.

(COMMERCIAL BREAK)

FOSTER: I'm Max Foster in London.

You're watching CONNECT THE WORLD.

Here's a look at other stories we're following this hour.

Europe's top two economies are calling for bold steps to ease the Eurozone's debt crisis. German Chancellor Angela Merkel and French President Nicolas Sarkozy met today in Paris, emerging with several proposals. They want a new economic government to coordinate the Eurozone's policies, a commitment from all 17 members to balance finances and an EU wide tax on financial transactions.

The death toll is rising in Latakia, a Syrian port city under siege. Residents say gunfire rang out all night and morning, as troops intensified a crackdown meant to silence anti-government dissent. One witness says at least five people were killed on Tuesday alone.

Much of the shooting and shelling is reportedly concentrated in poor city neighborhoods.

Arwa Damon gave us an update from Beirut just a short time ago.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: as far as we can gather, the crackdown is still well underway. As you were mentioning there, the life in this particular neighborhood, in the southern part of Latakia, has ground to a standstill. Residents that we were getting in touch with saying that the only sounds that they are hearing are ongoing -- the ongoing gunfire. There were again reports from -- that they were being shot at from -- from the -- from the sea. And it really is painting this incredibly chaotic and disturbing image.

(END VIDEO CLIP)

FOSTER: Meanwhile, an apparent first in the war in Libya. A U.S. defense official says loyalist forces fired a short range SCUD missile at a rebel stronghold. It apparently missed its presumed target of El Brega and landed harmless -- harmlessly in the desert. The attack came as rebels say they've tightened the noose soon -- or they will tighten the noose soon around the capital, Tripoli, and after a senior Libyan official arrived in Cairo amid rumors he had defected.

LEON PANETTA, DEFENSE SECRETARY: Gadhafi's forces are weakened. And this latest defection is another example of how weak they've gotten.

So I think -- I think, you know, considering how difficult the situation has been, the fact is, the combination of -- of NATO forces there, the combination of what the opposition is doing, the sanctions, the international pressure, the work of the Arab League, all of that has been very helpful in moving this in the right direction. And -- and I think the sense is that Gadhafi's says are numbered.

(END VIDEO TAPE)

FOSTER: Well, an anti-corruption activist in India has been freed hours after he and his supporters were sentenced to seven days in jail. Seventy-two -year-old Anna Hazare was planning a hunger strike to pressure the Indian government to tackle corruption. But authorities say he didn't have the official permission to do so. His arrest sparked some large demonstrations on the street. Hazare and his supporters say they won't leave the jail, though, until they're allowed to carry on with their hunger strike.

The man accused of putting a fake collar bomb on an Australian teenager will be held in U.S. custody until October. Paul Douglas Peters we are arrested by FBI agents on Monday in Kentucky.

As Ralitsa Vassileva reports, authorities want to extradite him to Australia, where he faces charges, including kidnapping.

(BEGIN VIDEOTAPE)

RALITSA VASSILEVA, CNN CORRESPONDENT (voice-over): It was a manhunt that started after a bizarre bomb hoax two weeks ago in Australia and ended Monday 9,000 mils or 14,000 kilometers away in the United States.

An FBI SWAT team arrested Paul Douglas Peters at his ex-wife's Kentucky home. He's accused of breaking into a home in an upscale Sydney suburb, seizing an 18 -year-old girl studying for exams and collaring her with a suspected explosive device to extort money from her parents.

LUKE MOORE, NEW SOUTH WALES POLICE: There was a -- there were a range of pieces of evidence that led us to identifying this suspect. I can't speculate on -- on the individual items of that -- of that evidence.

VASSILEVA: Madeleine Pulver spent 10 terrifying hours attached to the device before it was removed by a bomb squad that determined there was no explosive. Mention, Madeleine's family spoke out after the capture of the 50 -year-old suspect.

BILL PULVER, MADELEINE PULVER'S FATHER: On behalf of Maddie and the entire family, we are enormously relieved that an arrest has been made in the United States overnight. These past two weeks have been a very difficult time for us and we are hopeful that this development marks the beginning of the end of this traumatic ordeal for our family.

VASSILEVA: Australian police are seeking Peters' extradition and say he will be charged with kidnapping, breaking and entering and demanding property with menace.

Ralitsa Vassileva reporting.

(END VIDEO TAPE)

FOSTER: Watching TV could kill you before your time, so says a study in the "British Journal of Sports Medicine." Australian researchers say every hour an adult watches TV chops around 22 minutes off their life. And those who watch around six hours a day for life can expect to life almost five years less than people who keep the telly off. The authorities speculated too much sitting leads to mindless eating and obesity and a greater risk of chronic disease. CNN's fine, though.

Plus, coming up here on CONNECT THE WORLD in 60 seconds, a former England cricket captain makes a bold prediction. Michael Vaughan has high hopes for the best team in the world right now.

And in just over 10 minutes, it's not what Chancellor Angela Merkel wanted to hear. The economic powerhouse of Europe is slowing almost to a standstill.

All the details and analysis ahead.

(COMMERCIAL BREAK)

FOSTER: From England's cricket captain, Michael Vaughan, says his country will dominate test cricket for years to come. And England now the number one Test site in the world after passing India. You saw there the teams celebrating last week's victory and their ranking.

CNN's "WORLD SPORT" Alex Thomas is with me in the studio.

We're happy.

ALEX THOMAS, CNN SPORTS CORRESPONDENT: Yes, absolutely.

(CROSSTALK)

THOMAS: And -- and it's hard for English people to get excited about that, because they've enjoyed moaning about the nation's...

FOSTER: Is it...

THOMAS: -- cricket team for so long.

FOSTER: -- we like moaning, generally, don't we, really?

THOMAS: And let's not forget, it was a decade ago, England were lower than any of the other six full Test ranked countries, the bottom of the pile, now at the top. A lot of hard work in between. You need talented players, of course. And there's an element of luck in that.

There's also been a lot of hard work, science, preparation, good coaching and a great captain-coach combination now between Andy Flower and Andrew Strauss. And Michael Vaughan is saying, as you just mentioned, that England can dominate for years to come, quite a prediction, but one that you tend to believe when it comes from someone with Vaughan's cricketing pedigree.

(BEGIN VIDEOTAPE)

THOMAS (voice-over): As England captain, he won more Test matches than any of his predecessors and his most famous trial was in 2005, when the ashes were regained from Australia after a wait of 16 years.

Michael Vaughan was also a fluent batsman, enjoying his best season in 2002, when he hammered 900 runs from just seven tests.

It's fair to say that Vaughan played his part in England's renaissance and now, two years after his retirement, the team is officially the best in the world.

MICHAEL VAUGHAN, FORMER ENGLAND CAPTAIN: It's quite nice, because considering, for the time that I played and Australia were number one for - - for so long. You know, this is just the start for them, though. They've only just become the number one team in the world. I will say that they're looking like they're going to be there for a while. They've got a very strong squad. They've got a very strong in-depth in terms of all the areas of the team, you know, it seems to be covered. It's very similar to what the Australian team was for -- for many, many years. I look back at the Australian team, you had like Stewart McGill (ph) couldn't get in, Stewie Lowe (ph) couldn't get in, Darren Lehman (ph), Devie Nuto (ph). There were so many great players who should have been playing Test match cricket who couldn't play because they couldn't get in the team.

And England has that now. So I expect them to dominate Test cricket for a -- for a while.

The one day game is still a problem. We're still not treat in that aspect of the game. And I think that's -- the real sign of a great team is if you can dominate all aspects of the game. That's what Australia did. And that's what England will be looking to do.

THOMAS: England's joy has only accentuated India's misery, four months after being crowned cricket world champions. Vaughan has a theory on that.

VAUGHAN: The facade of doing great, but, you know, it -- it's quite interesting to see what they're up against. And, I mean that's my one concern about Test match cricket at the minute, that I'm seeing too many easy series. But you could say that is because of the fact that England is so good. England is just dominating and -- and bullying teams because it's so powerful. I -- I would say that I think India, in particular, seemed to have just lost their vision for Test match cricket. India went from the World Cup to the IPO (ph) straight to the West Indies straight through England. I think they've gone to Australia, as well, for this. And that's too much to ask of any -- any players. And you can tell from the Indian players that it's not their fault. They're tired. You know, they're mentally pretty -- pretty shocked because they're against a very good team. And they just needed more time to proper to have one game leading into this Test series in England. That was two days, because one day was rained off.

And that's not enough preparation when you're playing against such a good team.

THOMAS: England's former captain also offered his view on the challenges ahead for this now history making team.

VAUGHAN: I think Australia will come back. I really do. I know they've got a group of young players underneath the team at the minute that, potentially, by 2013, could be ready to play pretty well in Sri Lanka.

So I think a new vision of the captain of Michael Clarke is a good idea. I think he'll bring a lot of energy and positive new ideas.

I think South Africa, at this minute, would be the one team that would give England a really good game in England's condition. It's more than (INAUDIBLE). I really think now they're the two ballers that can create havoc.

THOMAS: Beyond cricket, Vaughan is now batting for underprivileged teenagers. As an ambassador for Laureus, which promotes social change through sports.

VAUGHAN: But I think the biggest thing is to try and get this gang culture away. So we want the people involved in the games to come and create their own gangs, but in the sporting environment.

And I think in the last week in -- in London, Birmingham and Manchester and Nottingham, I think we've seen, you know, what kids can get up to on the streets if -- if they're allowed to run. And I think projects like Urban Stars are perfect to try and get the kids off the street to get involved in sport. You know, I really am a big believer that sport can make a big difference.

(END VIDEO TAPE)

THOMAS: And that was Michael Vaughan, former England cricket captain, predicting great things ahead for England, but saying South Africa could be their biggest rivals. And that's the team that visit England this time next year.

Let's turn to other sport now and the battle to book a place in the lucrative group stages of the UEFA Champion's League. Qualification could be worth as much as $40 million. And 20 clubs are in the hunt, including big European sides like Arsenal, Bayern Munich and Benfica.

Let's take a look at the latest scores. Arsenal still leading by a goal (INAUDIBLE) against Udinese. You've got Sturm Graz of Switzerland doing one all away. Copenhagen trailing Viktoria Plzen, the Czech champions, 2-1. FC Twente, Dutch champions in 2010, two on down and home to Benefica, two time European Cup winners, but way back in the '60s. And Lyon, semifinalist last season -- or in 2010, I should say -- 3-1 up on Rubin Kazan.

That's the latest scores in the Champion's League. And we can show you now why it's so important for both sides to try and get to the main group phase. From a sporting and a financial perspective, UEFA gives every club $5.6 million for just competing in it. The prize money then breaks down like this -- $800,000 for every match played. An extra $1.1 million per win. $400,000 just for a draw. We're talking about the possibility of a team making $12 million to $15 million. And it could be worth as much as $40 million, some say, if you take into account owner sponsorships and that sort of thing.

On tomorrow's CONNECT THE WORLD here, you can hear from Manchester United legends Bobby Charlton. And the former World Cup winner gives us his view of United's new goalkeeper, David De Gea, in "WORLD SPORT" in an hour's time. A little tease for you.

FOSTER: We look forward to it, Alex.

Thank you very much, indeed.

All right, coming up on this program, a common debt crisis demands a common response from a central economic government -- France and Germany unveil a plan to get the Eurozone's finances back on track.

Does it go far enough, though?

Also, in for the long haul -- we'll board a train that snakes through seven time zones, making it the longest railway in the world.

FOSTER: It's time to push through this period of economic insecurity and get to a better place. That message from Barack Obama on the second day of his tour through what's known as America's heartland. He spoke to rural communities about efforts to stimulate their economies while taking some swipes at his political rivals.

Today, Wolf Blitzer interviewed the U.S. president one-on-one -- Wolf.

WOLF BLITZER, HOST: Thanks very much, Max.

We -- in fact, we just finished taping the interview with the president. And we went in-depth on many issues, including, of course, issue number one here in the United States, the U.S. economy and the jobs, all -- all of those related issues, the future of Medicare, for example.

I did press him on how concerned he might be -- I know I'm concerned - - on the 10th anniversary of 9/11, there could be some effort to try to seek revenge for the U.S. killing of Osama bin Laden.

He is -- he is concerned about it. He did mention specifically his fear of what he called a lone wolf terrorist trying to do something here in the United States along the lines of what happened in Norway, for example.

We went through all of that. But we also got into politics, including now, the Republican presidential candidates. That field is beginning to take shape. And he minced no words specifically in going after Texas Governor Rick Perry, now one of the Republican candidates, who only the other day suggested that the men and women of the United States military might not respect President Obama as commander-in-chief.

Let me play this clip for you and our viewers, Max.

Listen to this.

(BEGIN VIDEO TAPE)

BLITZER: Rick Perry, the governor of Texas...

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Right.

BLITZER: -- Republican presidential candidate now, says the men and women of the United States military want someone who's worn the uniform. He says he served in the Air Force.

Do you see a comment like that that he makes referring to you as disrespectful to the commander-in-chief?

OBAMA: You know, Mr. Perry just got in the presidential race. And I think that everybody who runs for president, it probably takes them a little bit of time before they start realizing that this isn't like running for governor or running for senator or running for Congress. And you've got to be a little more careful about what you say.

But I'll cut him some slack. He's -- he's only been at it for a few days now.

BLITZER: Mitt Romney says corporations are people.

Does he have a point?

OBAMA: Well, if -- if you tell me that corporations are vital to American life, that the free enterprise system has been the greatest wealth creator that we've ever seen, that the corporate CEOs and folks who are working in our large companies that are creating incredible products and services and that is all to the benefit of the United States of America, that I absolutely agree with.

If, on the other hand, you tell me that every corporate tax break that's out there is somehow good for ordinary Americans, that we have a tax code that's fair, that asking oil and gas companies, for example, not to get special exemptions that other folks don't get and that if we're closing those tax loopholes somehow that that is going to hurt America, then that I disagree with.

And I think that corporations serve an important benefit but, ultimately, we've got to look at what's good for ordinary people. How do we create jobs? How do we create economic growth? And a lot of the special interest legislation we see in Washington isn't benefiting ordinary people.

(END VIDEO CLIP)

BLITZER: Now, the president knows he's going to have a tough reelection campaign, especially because of the state of the US economy.

Back, Max, at one point, I referred to remarks he made shortly after he was elected saying that if the US economy had not turned around within three years of his taking office, he'd probably be a one-term president, and he acknowledged that being president is a lot more difficult than he had originally thought, and we go into some specifics on that.

It was a wide ranging interview. We covered a whole bunch of other issues as well, and we're going to air it, as you know, Max, in "The Situation Room" on CNN and CNN International.

FOSTER: Absolutely, Wolf. Thank you so much for bringing a highlight of that, and as Wolf was saying, viewers in Europe, the Middle East, and Latin America can see Wolf's interview with President Obama on "The Situation Room."

It's later, 11:00 PM in London. That's 5:00 PM in Mexico City. Our viewers in Asia will see it on "World Report," that's Wednesday morning at 6:00. Do tune in for that.

But right now, let's check the headlines this hour.

News Corporation executive James Murdoch could soon get a second grilling from British lawmakers as they look into whether he lies during their phone-hacking investigation. A newly released letter says the practice was widely discussed at News Corp's now shut down tabloid "The News of the World."

There are reports of more gunfire and shelling in the Syrian city of Latakia. One resident says at least five people were killed today. These pictures from YouTube are said to show a tank in the city, but CNN can't confirm their authenticity.

Rebels in Libya think they'll soon be able to start moving in on the capital, Tripoli. This comes as a US defense official says loyalist forces have fired a short-range Scud missile at a rebel stronghold. It apparently missed its presumed target of al Brega and landed in the desert.

An anti-corruption activist in India has been freed hours after he and his supporters were sentenced to seven days in jail. 72-year-old Anna Hazare was planning a hunger strike to pressure the Indian government to tackle corruption, but authorities say he lacked official permission.

Stocks on Wall Street snapped a three-day winning streak, sinking almost 77 points today. Investors couldn't shake off deep concerns over Europe's debt crisis, and troubling numbers out of Germany certainly didn't help, as Felicia can now tell us from New York. Hi, Felicia.

FELICIA TAYLOR, CNN CORRESPONDENT: Hey, Max. That's right, this was absolutely a European story, today, as far as the stock markets in the United States were concerned.

And you're right, it began in Germany, when we got that report on second quarter GDP growing just one tenth of one percent, and that follows the first quarter, which was actually quite strong, that with a gain of 1.3 percent.

So, if you take a look at it overall, if the strongest economy in the euro zone which, of course, is Germany, is having sort of anemic growth, they're not going to be so likely to want to help out some of the other economies when it comes to doling out money. So, that was a real problem for the marketplace.

And then, of course, we've been talking about the meeting between Angela Merkel and Nicolas Sarkozy. The problem for the investors from that meeting was the fact that they wanted to initiate this possible new tax on any financial transactions.

And that's very significant, because if that starts to become a widespread issue, then obviously financial institutions aren't going to be very happy with that. And across the board, we saw the financials pretty much down anywhere between two and four percent.

So, in a marketplace where we're feeling the fears come back in, naturally investors went back to gold, and gold is up, now, around about $1788, so real strength there, again, in the gold markets.

And one of the technical experts out there who's quite well known, a woman named Louise Yamada, says that we could see gold hitting $2,000 in very near term. Max?

FOSTER: Unbelievable. Felicia, in New York, thank you very much, indeed.

The leaders of Germany and France are trying to restore market confidence with a plan to shore up the euro and ease the continent's debt crisis, but critics say there are some glaring omissions. Nina Dos Santos has details of today's summit in Paris.

(BEGIN VIDEOTAPE)

NINA DOS SANTOS, CNN CORRESPONDENT: The French president Nicolas Sarkozy held crunch talks on the future of the euro with his German counterpart, the chancellor Angela Merkel in Paris.

On the topic of discussion, they decided to put forward a series of proposals designed to try and allay fears about the future of the currency that is shared by no less than 17 nations across this region.

On the one hand, they decided to put forward proposals to introduce a tax on financial transactions designed to remove speculation in the financial markets that is now priced three euro zone nations, Greece, Portugal, and also Ireland out of the world's bond markets and into bailout territory.

They also decided to try and present a more united front, saying that they'd like to see European leaders meet on a more frequent basis, at least twice a year, and to preside over those discussions, they will be electing Herman van Rompuy, the current president of the European Council, to steer those discussions for two and a half years to come.

But finally and most importantly, the topic of fiscal cooperation. Because of course, one of the reasons why economists have been so worried about the euro is that though they do have a monetary union, they don't yet have an adequate fiscal union, they say.

What they're going to be proposing is that all of the 17 nations that share the euro now adopt more stringent budget deficit reduction plans designed to sort of balance the budget deficits with the tax revenues and growth.

The topic of euro bonds didn't officially feature on the agenda, but it came up at the press conference.

ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): I think people are looking for a panacea to solve the crisis. Some people have put forward euro bonds as a magic cure. But I'm not convinced that they would be the ideal solution.

NICOLAS SARKOZY, PRESIDENT OF FRANCE (through translator): Euro bonds could only be viewed as a result of a process of integration and under no circumstances a precondition.

That would endanger the most stable countries in the euro zone, ones with the best ratings and who find themselves obliged to guarantee the debts of others over which they have no control.

DOS SANTOS: These proposals will officially be put forward in September, but already before we get to that point the economic landscape is shifting fast.

We learned recently that France posted no growth in the second quarter of the year and Germany's growth came in much worse than expected, rising just a tenth of one percent.

And that means an ever-changing landscape as these leaders come together and try and hammer out some kind of concrete solution to a euro zone crisis that is now in its 18th month and counting.

Nina Dos Santos, CNN, Paris.

(END VIDEOTAPE)

FOSTER: Well, some critics say the French-German proposal simply doesn't go far enough. They believe euro bonds are the best option for diffusing the crisis. Richard Quest joined me in the studio a short time ago to explain why Europe's top two economies are so reluctant to pool collective debt.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN BUSINESS CORRESPONDENT: Merkel and Sarkozy have come out against the euro zone bond, and you can see why they are so wary about something that others say will be a jolly good idea.

At the moment, for example, Greece's interest rate -- yields, it's called on the ten-year bond -- Greece is having to pay 15.5 percent if it was to refinance its current bonds.

Spain which, of course, has been under attack as well, would be spending 4.96. It's a high yield. Lower than Greece's, but compare that yield to, say, what Finland is paying, 2.71 percent or, of course, the anchor yields of Europe and the euro zone is the German bond, and that trades or to yield an interest rate of 2.32 percent.

So, Germany can clearly borrow money cheaper than anyone else in the euro zone. And the idea of a euro zone bond would be to create a common area, a common bond that would link them all together. They would all, effectively, be guaranteeing the debts of each other.

What would be the effect? Well, for countries like Greece, that rate would -- their rate would come down dramatically.

But for those low countries like Germany and Finland, no question about it, their low yield would be under serious threat. It may not go up by much, but that would be an anathema to the Germans.

Fundamentally, the euro zone bond involved a massive transfer of risk from those low-yield countries to the more profligate in the south. And that is why, although the euro zone bond will come about in the fullness of time, it certainly won't come around anytime soon.

FOSTER: What we're talking about here is fiscal integration, isn't it? And it's the pace at which that happens.

QUEST: Yes. And just as the US Treasury issues bonds in the United States for the country, so eventually, there will be a mechanism for a euro zone to issue bonds guaranteed by them all.

But you can't do that when you have such disparity. When you've got Germany, as you've just seen, with two and a bit interest rate at present, and Greece at 15, or Ireland at whatever it is.

FOSTER: So, what are they going to do in the meantime, then? They're working towards more coordinated -- economic coordination?

QUEST: Yes, try not to sneer as you say that, because it's a process. And what we saw on the 21st of July followed on by what we've seen today, Germany and France are moving forward. Firstly, with a common corporation tax. Secondly, with a fiscal tax -- a financial tax. Then with greater coordination.

It's a process. And they both agree the euro zone bond is at the end of that process.

(END VIDEOTAPE)

FOSTER: Well, coming up on CONNECT THE WORLD, all aboard for one of the most famous train journeys in the world. As part of our Gateway series, meet the travelers and the staff crossing vast plains, rivers, and time zones.

(COMMERCIAL BREAK)

FOSTER: Vladivostok, a Russian city about as far away from the capital as you can get. In fact, the Pacific port is seven time zones away from Moscow and nearer to North Korea and China.

Because of its location, Vladivostok is a massive gateway to Europe and to Asia. Snaking its way from Russia's Far East is the world's longest railway. Vladivostok is the terminus for the great Trans-Siberian Railway ferrying people and goods westwards across the country.

CNN climbed onboard what many considered -- consider an economic spine of Russia.

(BEGIN VIDEOTAPE)

BECKY ANDERSON, CNN CORRESPONDENT (voice-over): With the precision of her makeup and the tilt of her hat, Olga is a Provinitza, a Russian carriage attendant traveling the length of the great Trans-Siberian Railway.

(TRAIN WHISTLE)

OLGA GAGARINA, TRAIN ATTENDANT, TRANS-SIBERIAN RAILWAY (through translator): It's 18 years today I've been working as a train attendant. My uniform always makes me feel different. I become more serious and I feel more responsible.

ANDERSON: This is the longest railway in the world, 9,288 kilometers from Moscow to Vladivostok.

GAGARINA (through translator): It's more of a lifestyle, now. I spend two weeks on the train and two weeks off at home.

ANDERSON: Next stop, Khabarovsk, where passengers can stretch their legs.

Galina boarded the train seven days ago in Moscow. Now, there's just one night left.

GALINA BUZINA, PASSENGER, TRANS-SIBERIAN RAILWAY (through translator): We wake up, have breakfast, walk around the station when the train stops, read, watch TV, and the day goes really fast.

ANDERSON: Galina's been taking this route since 1970 to visit her sister in St. Petersburg.

ANDERSON: Train manager Vladimir has a strict schedule. Snaking through seven time zones and 87 stops, there's no time to lose.

VLADIMIR SHMELYOV, TRAIN MANAGER, TRANS-SIBERIAN RAILWAY (through translator): All our clocks are set to Moscow time on the railways to avoid the mess with time zones. It doesn't really matter where the train goes, north or south or whatever.

Our train leaves Moscow every two days on odd days and arrives in Vladivostok on even days.

ANDERSON: People have been making this journey since 1916, when the final tracks into Vladivostok were laid.

Even in the harsh Russian winter, the Trans-Siberian has been a permanent fixture on the landscape.

Working onboard is a way of life.

VIKTOR ZHAROV, MECHANIC, TRANS-SIBERIRAN RAILWAY (through translator): I'm in charge of fixing everything on the train. Now, I'm fixing one little problem between cabin connections. Nothing serious. I'll fix it in a minute. It's just an average working day.

ANDERSON: Eight days on and the train pulls into Vladivostok, the terminus of the Trans-Siberian.

It's not just passengers who use this service. Its route is an economic lifeline to the towns and cities along its way.

The Trans-Siberian Council says that this track carries up to 100 million tons of freight each year, 50 percent of Russia's imports and exports pass along this route, all made possible by this Pacific port city, where the Trans-Siberian track runs directly down to the water.

ALEKSEY DOVBYSH, COMMERCIAL PORT OF VLADIVOSTOK (through translator): Historically, the port and the railway work together. We are friends. Our clients don't have any problems exporting cargo from the port to any Russian region.

ANDERSON: But it's the iconic passenger trains which have given the Trans-Siberian journey its image as the ultimate passage through Russia.

GAGARINA (through translator): It may not be easy to find two weeks for this trip, but you really should try. It's very romantic, and I know that there are many people in the world who'd love to make this journey.

(END VIDEOTAPE)

FOSTER: Now, in case you missed anything from our Gateway series, from managing air traffic in Amsterdam to parking the Queen Mary II in Hamburg, you can catch up on everything. Just visit our Facebook page at facebook.com/CNNconnect. Join now and become a fan.

Coming up on CONNECT THE WORLD, it seems nice guys do finish last.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A selfish attitude pushes you further. Aggression in the workplace can be seen as competence.

(END VIDEO CLIP)

FOSTER: A new study suggests you've got to get mean if you want to get the cash. You probably won't have many friends, though. More on that after the break.

(COMMERCIAL BREAK)

FOSTER: Being nice can certainly help make you popular. When it comes to being profitable, though, it doesn't seem to pay. A study in the "Journal of Personality and Social Psychology" says more agreeable men earn less than ruder colleagues.

As you can see here, my colleague Richard Quest is always agreeable. But if Richard were ruder, he would earn more because he's likely to be assertive in salary negotiations. He's also more likely to have nicer applicants to get the job.

This is producer Gail. It wouldn't be worth her being rude because researchers say women don't reap the benefits of rudeness to the same extent. They say women who are hard to get along with don't gain as much as unpleasant men.

We've been having a bit of fun with the story, as you can see, but do you really have to change your personality to climb the corporate ladder? Well, Stephen Viscusi is the author of the book "Bulletproof Your Job." He joins me now from CNN New York.

Thank you so much for joining us. First of all, this wasn't your study, but do you agree with what's in it?

STEPHEN VISCUSI, AUTHOR, "BULLETPROOF YOUR JOB": Well, I do agree with what's in it, Max, and funny we should talk about your colleagues. We now know why Piers is making so much money at CNN.

(LAUGHTER)

FOSTER: Oh, that's libelous! Although he wouldn't dare.

VISCUSI: See? Now -- now that being said, the world is mad as hell over this recession, and no one wants to take it anymore, and men more than women are -- have to be assertive today in order to get that raise, in order to keep that job, and get whole again.

All over the world, where we've been being ripped off by our bosses for the last four years.

FOSTER: Let's just -- OK.

VISCUSI: Women, on the other hand, need to maintain that feminine side, otherwise, they become "masculine," so it works to their favor to use their feminine wiles to conjure their raise, as sexist as that may sound.

FOSTER: It is sexist, because the boss isn't always a man. So, isn't that a problem with the study? It depends on who the boss is and what type of person that is?

VISCUSI: Not really. I think it really depends entirely on who the individual is, because men and women bosses react the same way.

Women don't seem to like overly assertive women, they think it's a masculine trait. That's why women -- some women tell us they don't like working for women. So, they respond to the employee the same way. They're still a subordinate.

Why this is so apparent today is because workers throughout the world have been taken advantage of over this worldwide recession over the last couple of years.

Now, we're slowly, very slowly, eking our way out of it. Wages are coming back, or they should be, and men need to be assertive -- not rude, but assertive.

And there's fine line becoming -- between becoming too aggressive and assertive and being disrespectful to the boss. Do not be insubordinate, but be assertive.

FOSTER: That's your view. Let's hear the view of people out on the streets, workers.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A selfish attitude pushes you further. Aggression in the workplace can be seen as competence in the same way that a lot of people who aren't confrontational can often have their very valuable opinions overshadowed by those that are more aggressive but know less.

UNIDENTIFIED FEMALE: No one likes an unpleasant, aggressive person, so -- and I don't think it's necessary. You can still be very, very good at what you do and you can still be respectful of other people and somewhat pleasant.

(END VIDEO CLIP)

FOSTER: But being assertive is one thing. I'm just wondering, if you're looking at this -- we're looking at this from the workers' point of view too much.

If you look at it from the boss's point of view, perhaps someone coming to their office every few weeks who's quite good at their jobs pestering for a pay rise and being rude about it, the best way to deal with them is to give them the pay rise.

Whereas the person that's not asking for it, perhaps you think you can get away with not giving them the pay rise. It's more simple than just being assertive.

VISCUSI: Well, nothing is worse than being what I call an HME, or a high-maintenance employee. And your viewers can Twitter me @workplaceguru and see some of my tips on finding and asking for a raise today, but the secret is really to be persistent but not to be insubordinate and not to be rude.

It's like that woman said, the redheaded woman we just saw on the tape. Do not be obnoxious and do not be rude. Nobody likes a rude person. But they like a responsible person and an authoritative person, man or woman, it never hurts to ask, as we say here in New York City.

FOSTER: Is being nice seen as being weak?

VISCUSI: Being polite and being nice can still mean being assertive. Being nice and acquiescing to certain things is fine, but a certain passive-aggressiveness, it's almost like changing your tone or changing your voice.

You know, here, we hear that British accent and everything seems nice to us, so I can't imagine anyone there getting a raise because everybody seems so nice all the time.

FOSTER: Well, I think Americans are paid more, aren't they, generally? So you may have sort of tapped into something there.

VISCUSI: Well, we're going back to Piers again.

FOSTER: He's paid more there, I'm sure, than he was here. But just explain that what people can -- I know people -- you're trying to tempt people to your Twitter page, but just say --

VISCUSI: I think --

FOSTER: Give us a quick tip on getting a pay rise.

VISCUSI: Well, it's also getting -- right. It's also on CNN. Really, here's one of the secrets. You're going in for a review soon. Guess what? Bring the latest copy of your resume.

Chances are, the supervisor that you're asking the raise from, guess what? They probably weren't your supervisor two years ago, because that supervisor probably lost their job.

So, when you go in, you may be having a new supervisor, they will see how you're interpreting your duties and responsibilities, so bring your resume to your new boss and let them see and remind them of your education, your previous experience, and let them see how you view your responsibilities and your duties on the job, now, which may be more work than they think you're doing.

Last but not least, it never hurts to let the boss know, guess what? I have my resume ready.

FOSTER: Philip (sic), thank you very much for your insight on this story. It's got everyone talking today, that's for sure.

Now, finally tonight, our Parting Shots, and here we see legendary Aussie rockers AC/DC in their harder days. Now, they're banging out wine, would you believe?

There's a familiar theme, here. You can see -- you can taste a black -- "Back in Black" Shiraz, there's a "Hells Bells" Sauvignon Blanc, would you believe? And "You Shook Me All Night Long" Moscato.

With so many alcohol-themed tunes to choose from, the band's unlikely to be lost for names. It remains to be seen whether there'll be a hit, though.

And these guys are well known for their love of all things alcoholic. The Rolling Stones started producing their own wine back in 2008. An unusual history lesson for you here.

And you'll be able to rock and roll all night after a few of their wines. They may not look like world-class sommeliers, but the band KISS is also in the drinks business, would you believe it?

I'm Max Foster, thank you so much for watching. The world headlines and "BackStory" will follow this short break.